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As of this week, DVD X Copy, a 321 Studios application recently reviewed by PC Magazine, is readily available from the 321 Web site and many popular retailers, including CompUSA and Frys. But if seven of the leading movie studios have their way, this wont last long. On April 25, in US District Court for the Northern District of California, Judge Susan Illston will hear a motion from the seven studios claiming that 321 Studios two products (DVD Copy Plus and DVD X Copy) are illegal under the Digital Millennium Copyright Act (DMCA) and should be removed from the market.

Early last year, the CEO of 321 Studios, Robert Moore, read a news article that mentioned DVD Copy Plus, a 321 software application that copies DVD movies onto CD-R discs. A spokesperson for the Motion Picture Association of America (MPAA), the organization that represents film, home-video, and television companies, had accused 321 Studios of selling piracy software in violation of the DMCA, a recent addition to US copyright law that protects digital media content.

Worried about the threat of criminal charges, Moore and his company soon filed whats known as an action for declaratory relief, asking the court to rule that DVD Copy Plus is not in violation of the DMCA. This may simply have been a way for the tiny company to ensure that any suit concerning DVD Copy Plus would be handled by the court of the companys choice.

"A declaratory relief action is an affirmative step by ones accused of wrongdoing to go have a court declare their actions legal," says Mark Grossman, head of the technology practice at the Miami law firm Becker & Poliakoff. "It lets you decide what court the suit will go to." The action named nine different movie studios as defendants: Columbia Pictures Industry, Disney Enterprises, Metro-Goldwyn-Mayer Studios, Pixar, The Saul Zaentz Company, Sony Pictures Entertainment, Time Warner Entertainment, TriStar Pictures, and Universal City Studios.

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In November, the company amended the suit, asking that the court also rule on the use of DVD X Copy, which lets you copy DVD movies onto DVD-R and DVD-RW discs, playable not just on computers but also on DVD players attached to televisions. Then, on December 19, seven of the nine studios mentioned in 321 Studios initial suit filed a counter suit, seeking not only to remove the tools from the market but also to recover damages from 321 Studios.

Signed by President Clinton in 1998, the DMCA prevents people from breaking the copy-protection schemes used by digital media. "It makes it a violation to sell software or anything else thats designed to circumvent the type of technology used to keep people from copying a DVD," says Manny D. Pokotilow, managing partner of the national intellectual property firm of Caesar, Rivise, Bernstein, Cohen & Pokotilow.

But the act also says that there are situations in which circumventing copy protection in this way is perfectly acceptable. Making a copy of a DVD is not against the law if you only watch the copy in private, dont give it away, and dont sell it. This is known as fair use.

321 bases its argument on section 1201 of the DMCA. The company claims that its customers use DVD Copy Plus and DVD X Copy to make backup copies of their own DVDs only. "You could theoretically [use this for piracy], but we have not had a single case where people are using this for anything other than its intended purpose," says Elizabeth Sedlock, chief marketing officer for 321 Studios. "The average citizen is not a pirate."

Could the courts rule in favor of 321? Possibly. In 1984, the Supreme Court ruled that Sonys Betamax VCR, which made the copying of television programs to tape a reality, was not in violation of copyright law, because most people simply used VCRs to time shift television programs, watching shows after they were aired. "They found that it was fair use to record for time-shifting purposes," says Pokotilow, "and since that was a substantial portion of the reason for making tape recorders, Sony could not be stopped from selling the BetaMax." According to Pokotilow, making backup copies of DVD certainly falls into the area of fair use. The case becomes a question of whether 321s customers are indeed using its tools for backup.

But one things for sure. This argument will not be decided on April 25. Whichever way Judge Illston rules, her decision is likely to be appealed. Robert Moore told PC Magazine that 321 will see this case to its conclusion, spending whatever money is needed. Up against the major movie studios, they may have to spend a great deal.

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